Daily Briefing - Lloyd's List...vessels, he told the Lloyd’s List Outlook 2020 forum, held in...

Lloydrsquos List | Daily Briefing Wednesday 11th December

Daily BriefingLeading maritime commerce since 1734

Wednesday December 11 2019

Decarbonisation delay lsquoposes shippingrsquos biggest threatrsquo

THE WORLDrsquoS SECOND-BIGGEST charterer of tankers says shipowners and operators must take all practical steps available right now to cut vessel greenhouse gas emissions amid rising uncertainty over which marine fuels will best for long-term use to meet decarbonisation targets

Grahaeme Henderson vice-president of shipping and maritime for oil major Shell said delays in addressing decarbonisation was the biggest threat to shipping over the next five years Emissions could be as much as 60 to 70 lower on the newest liquefied natural gas-fuelled vessels he told the Lloydrsquos List Outlook 2020 forum held in London on Tuesday (December 10)

ldquoWe should be doing the very best that we can do today not sitting back and waitingrdquo Mr Henderson said Shell chartered nearly 700 tankers in the spot market last year and is the third-party operator of a further 200 giving the oil company an influential voice in shippingrsquos decarbonisation debate

Uncertainty over fuel strategies emerged as the greatest challenge to operational efficiency in shipping in the Lloydrsquos List Outlook survey Some 51 of survey respondents said fuel technology was a greater challenge over the next five years than regulatory supply chain digitalisation and change management issues

The global commercial fleet of some 60000 vessels must halve greenhouse gas emissions by 2030 and reach zero by 2050 under new International Maritime Organisation targets However the decarbonisation agenda is accelerating faster than the development of

LEAD STORYDecarbonisation delay lsquoposes shippingrsquos biggest threatrsquo

WHAT TO WATCHIMO 2020 transition faces obstacles to bunkering

Outlook offers few hopes for box shipping

ANALYSISHas shipping taken its eye off the ball on safety

The Top 10 in ship finance

MARKETSGlobus Maritime cites negatives for dry bulk shipping

Ocean freight rates recovering on Asia-Oceania trade

IN OTHER NEWSPlakiotakis urges faith in IMO

MPA revokes IPP bunker supplier licence

China Merchants names new president

Pipeline operators to develop VLCC-capable terminal off Texas

Freeport LNG starts commercial operations in Texas

Lloydrsquos List | Daily Briefing Wednesday 11th December Page 2

zero-carbon fuel alternatives such as ammonia and green hydrogen to replace existing marine fuels

ldquoI donrsquot think that the fuel choice of the future has been made yetrdquo Mr Henderson told the forum ldquoTherersquos a long way to go on this and the more that I look at these (future) fuels the more that my technology team and Shell looks at these the more we see challengesrdquo

Newbuilding orders are stalling amid fears that ships propelled by liquified natural gas or residual or distillate fuels may have a limited lifespan Therersquos also rising concern that the slow adoption of LNG-fuelled engines is because itrsquos seen as a ldquotransitionalrdquo marine fuel

But the worldrsquos largest classification society DNV GL signalled at the forum that gas might be used for longer than expected as a marine fuel

ldquoMany talk about gas as a fuel being a transition type of fuel Irsquom not so certain that the transition will be shortrdquo Knut Oslashrbeck-Nilssen DNV GL Maritime chief executive told the forum Shipowners had only two choices today mdash to do nothing or use LNG as a fuel he said

ldquoWe could even see in 2050 and beyond that gas as a fuel will still be a very attractive solution Gas is absolutely a very viable solution now and will be for the next couple of decadesrdquo he said

The forum discussed recent challenges for a hydrogen-fuelled vessel trialled by Shell Mr Henderson said hydrogen was chilled to a liquid at minus 253 degrees Celsius compared to minus 162 degrees Celsius for LNG As a result Shell could not use the same inerting system for LNG

Kathi Stenzel the managing director for Intertanko said there were no regulations for shipping hydrogen either as a fuel or as a cargo and that the trial presented significant engineering challenges Intertanko represents independent tanker owners shipping energy commodities for oil traders and companies

Hydrogen was piped initially through the same pipe as LNG in the trial she said ldquoThere was liquid oxygen forming out of the air around it which if course is incredibly dangerous and not to be recommendedrdquo according to Ms Stenzel

Therersquos no single solution for alternative fuels she added ldquoBatteries and fuel cells might be the answer for the ferry sector and short sea shipping LNG right now is [a solution for tankers] but itrsquos probably not getting us close to where we want to be [on carbon emission reductions]

ldquoItrsquos not just a shipping question but a question about global energy We have to do something now and therersquos no excuse to sit back and say lsquotherersquos no perfect solutionrsquo We donrsquot have a perfect solutionrdquo

Mr Henderson said technology needed to be developed with support from governments and industry to fund research and development alongside widespread collaboration

ldquoItrsquos going to need collaboration on a scale that we have never ever seen in this industryrdquo he said ldquoNot just collaboration across shipping with owners engine and equipment manufacturers shipbuilders and class societies Itrsquos going to need collaboration outside with other industries as wellrdquo

ldquoWe may not have the first choice when it comes to ship fuelrdquo he warned ldquoIt could be that in even more difficult to de-carbonise industries such as airlines they may have the first choice of the fuel and we may have to have the second or third choice of the fuelrdquo

Shell had trialled wind sails which had reduce fuel use by 8 and also used air lubrication which reduced friction underneath ships to achieve a further 5 reduction in emissions Digitalisation had cut fuel costs a further 15 while a joint project with the Port of Rotterdam had reduced time in ports by 20 again achieving emission savings Mr Henderson said

ldquoIf you then add to that LNG as a fuel where an independent study has shown a reduction of emissions of 20 we can get to a stage by reducing our emissions by something of an order of 60 to 70

ldquoThat reduces the [decarbonisation] challenge so itrsquos not 100 itrsquos something like 30 to 40 Then we can look at mobile carbon capture on ships and get to the situation where wersquore making very big inroads on reducing carbon emissionsrdquo


WITH just a few weeks to go until one green shipping regulatory deadline shipowners with no prearranged sources are now facing challenges in getting prompt delivery of fuel oil with 35 sulphur in Singapore

Punit Oza of Klaveness Asia told Lloydrsquos List that at the worldrsquos top bunker port by marine fuel sales volume most tankers have switched from carrying and supplying lsquohigh-sulphurrsquo 35 fuel oil or HSFO to the lsquovery lowrsquo 05 sulphur fuel oil or VLSFO complying with the International Maritime Organizationrsquos global sulphur cap on marine fuels taking effect on January 1

Many large shipowners have sought cover for such exposure

Dry bulk-focused Oldendorff Carriers confirmed to Lloydrsquos List that it has chartered in a bunker tank in Singapore to mitigate disruption in refuelling its vessels with some 47 of its ships fitted with scrubbers

The green shipping regulation commonly dubbed IMO 2020 extends to ships with pre-installed scrubbers the option to continue to burn HSFO into 2020 and beyond

Still as Mr Oza suggested many other smaller shipowners have struggled with HSFO availability and other hurdles These are holding back turnaround times and driving up delivery costs tied to their bunker operations in Singapore and elsewhere

One trader citing tightness in bunker tanker fleet supply owing to tank cleaning ahead of IMO 2020 estimated that bunker delivery fees have at least doubled to $10 per tonne in Singapore

But Lloydrsquos List understands some Singapore-based licensed bunker players have already cleaned the tanks of their vessels in preparation for the switch

Equatorial Marine Fuel which ranks among the top five suppliers by bunker sales volume has almost completed the tank cleaning and recalibration of mandatory mass flow meters for supplying VLSFO

Executive director Choong Zhen Mao told Lloydrsquos List this process which also calls for MPArsquos

involvement in the MFM recalibration took on average one week per vessel

Considering most bunker players would have completed their fleet preparation by now Mr Choong argued that ldquoland-based logistical bottlenecksrdquo were the primary driver behind the surge in bunker delivery costs in Singapore

Concurring with Mr Choong Simon Neo the founder of bunker consultancy SDE International suggested that the still ongoing preparation for onshore storage to supply VLSFO had in several cases held back bunkering operations in Singapore

One veteran estimated that cleaning and switching onshore tanks would take on average seven to 10 days

That said certain shipowners also contributed to longer bunker turnaround times in Singapore

Calls made to refuel ships partially with VLSFO during each time inadvertently lead to lower bunkering efficiency a trader said

By Mr Neorsquos estimate the monthly bunker turns for each tanker in Singapore would have dropped to six to seven down from eight to nine previously

He qualified however that small to medium-sized bunker players that did not lock in fuel supplies ahead of the transition were more exposed to delays in topping up their tankers at terminals

Lloydrsquos List has earlier reported that major licensed bunker suppliers mdash Sentek Marine Ocean Tankers and Equatorial Marine Fuel included ndash are likely to have tankers lined up off Singapore and Malaysia to inventorise marine fuel

Both Mr Oza and Mr Neo shared similar views that the dust raised by Singaporersquos preparation from IMO 2020 may only settle in early January though this is not expected to sway the portrsquos standing as the preferred bunkering destination

ldquoVLSFO may not be as tight at Fujairah [which ranked third in bunker sales last year] but I see shipowners as still inclined to bunker in Singaporerdquo Mr Oza said

WHAT TO WATCH

IMO 2020 transition faces obstacles to bunkering


Whether it be for Singapore Fujairah or for that matter at any other ports bunker efficiency is not expected to match pre-IMO 2020 levels given the

increasing complexity from a mandatory transition to a multi-fuel future

Outlook offers few hopes for box shippingCONTAINER shipping shows little prospect of improving in the year ahead with the only bright spots emerging being reliant on even lower freight rates according to speakers at the Lloydrsquos List Outlook Forum held in London this morning

ldquoWhen we look at the outlook for trade there are some dark clouds on the horizonrdquo said Lloydrsquos List Intelligence managing director Chris Palsson ldquoAs of recently there is a new face that has risen above the horizon Greta Thunbergrdquo

The International Monetary Fund has revised its outlook for global GDP growth down to 3 the lowest since 2009 and concerns are still mounting over trade tensions and the effect they will have on container shipping

But Mr Palsson noted that over a five-year period general cargo volumes were still growing in line with overall GDP growth

ldquoContainerisation of goods still continues which means containerised cargo will grow fasterrdquo he said ldquoBut there are varying opinions on how much faster mdash anything from 0 to 5rdquo

There was even room for more containerisation of cargo he added particularly from bulkier commodities like forestry products

ldquoThere is still some potential for some more forest industry products where there is lots of volume that can still be containerisedrdquo Mr Palsson said

ldquoNot everything will be but if we have a situation where we have fleet growth above demand growth we have a situation where freight rates will be under pressure which will attract more cargoes in to boxesrdquo

But that still left the container sector in a situation with little to look forward to

When questioned about the best investment opportunities in the sector BIMCO chief shipping analyst Peter Sand said that building further capacity was unnecessary and that merger and acquisition activity had run its course

ldquoWhen we look at container shipping which is the most consolidated sector of all carriers are still not capable of exercising pricing power into higher freight ratesrdquo Mr Sand said

While investment in digitalisation brought carriers closer to their customers it was also a cost-cutting exercise in which the benefits would be passed onto the customer rather than the carrier

Moreover these decisions had to be made in the context of increasing trade tensions that were likely set to stay in place

ldquoWe need to accept we are now working in a different environmentrdquo he said ldquoThe world is becoming much more protectionist now This is geo-politics in the real world and shipping is a servant to thatrdquo

This was likely to bring about a lowering of demand commensurate with what had been seen for the past decade since the meltdown in markets in 2008rdquo Mr Sand said

ldquoIt has been 11 years but we are still dragging along with a lower level in the GDPtrade demand multiplier which is now half where it was a decade agordquo

HAVE safety matters taken a back seat in shipping

Industry leaders taking part in the Lloydrsquos List Outlook Forum largely agreed that environmental

issues have overtaken safety matters to a degree although steps are being taken to address various safety-related concerns such as liquefaction and misdeclared cargoes among others

ANALYSIS

Has shipping taken its eye off the ball on safety


According to DNV GLrsquos chief executive Knut Oslashrbeck-Nilssen safety culture needs to evolve as shipping too evolves with new technologies and complicated systems which if not properly managed will lead to catastrophes

ldquoEnvironmental issues have taken centre stage maybe rightfully but new technologies and practices will keep safety a priorityrdquo he told attendees at the forum held in London on Tuesday ldquoAnd class societies have a role to play hererdquo

ldquoWe take our responsibilities seriouslyrdquo

Royal Dutch Shellrsquos head of shipping and maritime Grahaeme Henderson said that ldquovery good workrdquo has been done in safety over the past decade with some sectors more involved than others

ldquoShipping is one of the most dangerous sectorsrdquo he said

The industry is five times more likely to suffer a fatality than the construction industry for example while suicide rates at sea are 6 to 15 higher than those working on land he pointed out

Improving safety stems from leadership in setting a safety culture he said adding that research into understanding how to make inroads in the area of seafarer wellbeing is important as wellbeing affects the way a ship is operated

ldquoGreater safety translates to greater business performancerdquo he said adding that there is still concern around safety

As a result major industry groups such as the International Chamber of Shipping BIMCO and others are meeting to try and start to address some of the issues such as liquefaction in the dry bulk sector and misdeclared cargoes in the container industry

The Top 10 in ship financeAS PART of our 2019 Top 100 most influential people in shipping series we look at the prominent rivals in ship finance where Chinese lenders remain the top players in the league

01 Zhao Jiong Bocomm Financial LeasingZHAO Jiong hardly appears in the media nor does he often speak on public occasions

However the chairmanrsquos habit of keeping a low profile does not prevent Bocomm Financial Leasing a subsidiary of Chinarsquos Bank of Communications from a remarkable expansion in ship finance this year

Excluding offshore business the company is the largest shipping lessor in China with about Yuan80bn ($114bn) of vessel assets as of mid-November Lloydrsquos List understands

This year it almost doubled the amount of invested capital in the sector from 2018 to nearly $4bn

Various new deals were reported over the past 12 months the foremost of which was the $750m orders of up to 10 very large ore carriers placed at Chinese yards in August

02 Zhao Guicai ICBC Financial LeasingZHAO Guicai told a recent local maritime forum that Chinese leasing houses ldquohave been playing an increasingly important role in the global ship finance marketrdquo

The president of ICBC Leasing has good reasons to be confident His company is undoubtedly is a top-notch player in this arena with invested capital in shipping expected to reach $28bn this year and existing vessel assets (excluding offshore) to top $10bn

The highlights of the leasing arm of Industrial and Commercial Bank of China the worldrsquos largest commercial bank by asset size include the $600m tanker and bulker newbuilding projects on which it worked together with state-owned domestic owner Shandong Shipping

More recently ICBC Leasing agreed on a $544m sale and leaseback deal for 10 Frontline suezmax tankers to be acquired from Trafigura

03 Hu Xiaolian The Export-Import Bank of ChinaCOMPARED to its domestic leasing peers which are in the ship finance limelight the Export-Import Bank of China also known as Cexim appears to be moving backstage with fewer deals reported in recent years Yet it is by no means retreating

For example Bocomm Leasing revealed in January that Cexim chaired by Hu Xiaolian was its third-largest bank financing source

The state lender is also a main stakeholder of the Silk Road Fund which finances many shipping and port projects including Cosco Shippingrsquos $63bn acquisition of Orient Overseas International Ltd


According to the latest data published by Petrofin the policy bank ranked at the top of a list of global shipping lenders with an existing loan book worth $175bn at end-2018

04 Michael Parker CitigroupINDUSTRY veteran Michael Parker has been a long-term fixture in ship finance at Citigroup one of the few western banks still lending money to shipping on any significant scale

However the past 12 months have been a landmark year for Mr Parker That includes promotion to chairman of its shipping and logistics division with the extremely capable Shreyas Chipalkatty stepping up into his old job as global head of shipping

Part of his new brief will be to focus on the top bankrsquos environmental criteria for lending to the industry to the sector

That is fitting too because Mr Parker is a key architect of the Poseidon Principles a set of lending criteria unveiled by 11 banks in June which make decarbonisation a central concern when considering loans to shipping companies

05 Lee Donggull Korea Development BankIN the second year of his three-year term Lee Donggull has achieved one major milestone in 2019 with the signing of the Won2trn ($17bn) merger deal for Hyundai Heavy Industries and Daewoo Shipbuilding amp Marine Engineering

While not a done deal yet this would have relieved the KDB chairman of one of his biggest headaches as the bank applied much of its efforts in recent years to helping the maritime sector a key element of the South Korean economy

Securing regulatory approvals from various jurisdictions are some of the hurdles the deal still faces

However Mr Lee already seems to be turning his attention to other important aspects of the economy Those involves attempts to streamline operations of Seoulrsquos two policy banks mdash the key lenders to the countryrsquos industrial sectors that include shipping and shipbuilding companies

Earlier this year he suggested the government should consider merging KDB and the Export-Import Bank of Korea for state budget efficiency

06 Andreas Povlsen Breakwater CapitalANDREAS Povlsen has built London-based

Breakwater Capital into a significant player starting from scratch as recently as 2011

Indeed he is known to pride himself on forming the kind of relationships with shipowners that used to be the preserve of old-school shipping bankers building on the kind of industry knowledge that enables Breakwater to see beyond the short-term horizons of private equity

Mr Povlsen has also made some great hires most notably Robin Perkin head of global shipping coverage at RBS before the axe fell and former Investec shipping head Jeremy Dean

Landmark Breakwater deals mdash the ones we know about that is mdash include the arranged marriage of United Offshore Support and Hartmann Offshore under the UOS banner creating a substantial presence in the anchor-handling tug support niche and loan finance for Global Ship Lease boxship purchases

07 Andy Dacy JP MorganANDRIAN (Andy) Dacy heads global transportation at JP Morgan which is still actively taking equity positions in shipping companies

Unlike some people in the investment bank space he actually seems to know what it is doing

He is also a regular fixture on the shipping conference circuit where he has been notable for his stress on the use of environmental protection considerations when deciding on loan applications from shipowners

Environmental social and governance targets are becoming increasingly important he stresses

ldquoCapital is only going to flow in the direction of companies that are doing the right thingrdquo he argued in an interview with Lloydrsquos List earlier this year

Pension funds will not invest in companies that do now comply with ESG requirements and while the acronym sounds like jargon now in two years everyone will have the message he insisted

08 Kristin Holth DNBDNBrsquos exposure to shipping has fallen sharply in recent years from $21bn at the end of 2016 to just $69bn now

Yet even at that much diminished level it still ranks as a major lender to the industry mdash and Kristin Holth DNBrsquos global head of ocean industries still


claims her place as one of the leading women in ship finance

Among the highlights of the year for Ms Holth has been her decision to throw the weight of DNB behind the Poseidon Principles a set of yardsticks that ties ship lending decisions to environmental criteria which were launched last June

Ms Holth is a graduate of the Norwegian School of Management where she studied international finance and earned an MSc in Business Joining a forerunner of her current employer in 1984 she has been there ever since

09 Philipp Wuumlnschmann Berenberg BankBERENBERG is that relative rarity a European bank that is actually increasing its lending to the shipping sector at the moment where it is said to be generating respectable yields on the back of low loan-to-value ratios

Heading up the show is Philipp Wuumlnschmann its head of shipping Mr Wuumlnschmann previously worked for Deutsche Bankrsquos Deutsche Schiffsbank unit where he was responsible for a $9bn book

In addition to his banking jobs he was also managing director of Erck Rickmersrsquo shipping interests prior to their sale to Zech Group

Mr Wuumlnschmann gets a lot of plaudits from his peers too ldquoNobody else is so respected and positively active in creative fields like himrdquo one of our friends in Hamburg tells us

10 Yang Li CSSC (Hong Kong) ShippingYANG Li is making his debut in Lloydrsquos List top 10

finance list by chairing Chinarsquos first listed pure shipping lessor that raised $250m from a Hong Kong IPO in June

While the valuation was questioned by some industry observers before the deal the yard-backed leasing house has since then fared steadily

Net profit increased 117 to about $57m for the first half of 2019 The size of its leasing fleet mdash consisting of all types of commercial vessels mdash stood at 101 units as of end-June

The business has been almost entirely built on the strong orderbook and credit support of its state-owned parent China State Shipbuilding Corp mdash now the worldrsquos largest shipbuilding group after the recent merger

Mr Yang (centre in the photo above) and his companyrsquos performance will demonstrate whether such a business model can sustain its prosperity over time

The Top 10 in finance list is compiled by the Lloydrsquos List editorial team and considers the most influential people in commercial banking investment banking and alternative finance

The Lloydrsquos List editorial board members are recognised experts who will provide feedback and guidance on all aspects of Lloydrsquos Listrsquos editorial output All board members remain strictly neutral as far as any companies or organisations to which they are affiliated are concerned You can find out more and view a copy of the Lloydrsquos List Editorial Values at httpslloydslistmaritimeintelligenceinformacomeditorial-board

GLOBUS Maritime says there is a continuing negative backdrop of factors in the dry bulk sector despite posting a profit rise in the third quarter

The company led by Georgios Feidakis said it experienced a short-term rise in spot rates during the third quarter allowing it to enjoy higher earnings

However the market turned at the start of the fourth quarter due to increased supply as vessels

returned from drydocks and was ldquofurther deteriorated by some demand-driven pressure which put a weight on ratesrdquo it said

ldquoWe are still being affected by the negative sentiment created by the trade war as well as the ore export bans in Indonesia and the coal import quotas in Chinardquo it added

Looking ahead the company expects that the new low-sulphur regulations by the International

MARKETS

Globus Maritime cites negatives for dry bulk shipping


Maritime Organization will likely boost the market

ldquoThe market is expected to be volatile but we do expect an upward trendrdquo it said adding that its fleet will be using low-sulphur fuel to comply as it is a ldquobetter-suited approach for the type and size of our vessels than using exhaust gas scrubbers that are expensive to install and operaterdquo

The company which has four supramaxes and one panamax will be carrying out maintenance on two bulkers this quarter which is expected to last 40 days

It posted an increase in profit to $280000 in the third quarter versus $254000 in the year-earlier period it said in a statement It also made a gain on derivatives

Ocean freight rates recovering on Asia-Oceania tradeOCEAN freight spot rates have begun recovering on the Asia-Oceania trade and are likely to continue rising mdash particularly exports to Northeast Asia mdash thanks to gradually improving utilisation and higher bunker surcharges although they remain well below their levels last year according to container shipping analyst Drewry

The analyst noted that ldquonot since the early part of this decade had the Asia-Oceania southbound container trade registered a quarter where volumes had declined on a year-on-year basis Then recently along comes four in a rowrdquo

It said the decline started in the last three months of 2018 ldquowhen headhaul traffic just dipped into the redrdquo This was followed by a 66 decline in the first quarter of this year with a further 42 drop between April and June it noted adding ldquoReturns for the third quarter of 2019 were even worse with a deficit of 68

ldquoBy the end of October data from Container Trade Statistics shows that year-to-date volumes from Northeast Asia had fallen by 53 and those from Southeast Asia by 62 At the receiving end Australian imports mdash covering 84 of the trade mdash decreased by 70 while flows into New Zealand actually recorded an increase of 29rdquo

Taking a ldquoglass-half-full attituderdquo Drewry said Octoberrsquos year-on-year comparison ldquodid move closer to the neutral line Because the demand slump started in late 2018 upcoming months will find it easier to improve on the weaker corresponding months of a year priorrdquo

It said the rolling 12-month demand chart ldquois now plateauing at around -5 and we anticipate that it will soon begin to ascend although not spectacularlyrdquo

While container demand ldquohas ebbed away for most of the yearrdquo freight rates mdash at least from Northeast

Asia mdash ldquohave actually taken the opposite path since Junerdquo Drewry noted with its Container Freight Rate Insight reporting that average 40ft container prices from Shanghai to Melbourne have nearly trebled over the course of seven months rising from $1090 in May to $2800 in November

ldquoNovemberrsquos benchmark was the highest since February 2018 and marked a 21 rise over the previous monthrdquo it noted

But it said higher freight rates on the Northeast Asia-Oceania corridor are also the consequence of reduced capacity since the end of the first quarter of 2019 ldquowhen Maersk Hamburg Suumld and MSC temporarily suspended their joint Yo-yoCAEPanda operation that used four ships of approximately 5000 teurdquo

Capacity was added back into the trade in August but as of November the total number of slots available to the market was still lower than in March thanks to other service rationalisations and void sailings Drewry said adding ldquoFewer slots countered the demand lull and pushed Northeast Asia to Oceania ship utilisation up from around 60 in March to just over 80 in October Load factors are much lower in the Southeast Asia to Oceania lane where ships are estimated to operating barely half fullrdquo

It reported that there has been a significant capacity influx from Southeast Asia including two more new services starting in October

According to Drewry research slot capacity from Southeast Asia to Oceania in November was up by 11 on October and 26 year on year

ldquoUnsurprisingly spot rates from Southeast Asia have not had the same impetus as from Northeast Asia with Singapore to Melbourne spot rates currently only around $1500 per feu according to Drewryrsquos


Container Freight Rate Insight which is roughly $200 down on where they were at the start of the yearrdquo the analyst noted

It concluded ldquoThe headline growth rate figures for Asia-Oceania will start to look better soon but

that does not mean that the trade will return to the heights of 2018 in the near term Spot rates are likely to continue rising (more so exports from Northeast Asia) thanks to gradually improving utilisation and higher bunker surchargesrdquo

IN OTHER NEWSPlakiotakis urges faith in IMOGREECErsquoS shipping minister Ioannis Plakiotakis has called for international backing for the International Maritime Organization in the battle against climate change

Mr Plakiotakisrsquo support for the IMO comes as the EU appears on the brink of taking its own regulatory steps for shipping emissions It also comes just days after he created a stir at the IMO podium by asking the London-based organisation to consider delaying implementation of its global sulphur cap

During a speech made at the Capital Link lsquoInvest in Greece Forumrsquo at New Yorkrsquos Metropolitan Club he said ldquoA global shipping industry requires global rules and international regulations to operate smoothly on a level playing fieldrdquo

MPA revokes IPP bunker supplier licenceTHE Maritime and Port Authority of Singapore has revoked yet another bunker supplier licence bringing the number of licensed players at the worldrsquos top bunker hub to under four dozen

Privately owned Inter-Pacific Petroleum will cease to operate as a marine fuel supplier with effect from December 9 2019 following the appointment of a judicial manager for the financially insolvent player MPA said in a statement

IPPSrsquo insolvency was seen as among the final triggers leading to Socieacuteteacute Geacuteneacuteralersquos decision to shrink or exit from extending financing to Singaporersquos bunker industry

China Merchants names new presidentCHINA Merchants Group has appointed Hu Jianhua as president the second-in-command at the state conglomerate which boasts more than $1trn of total assets

Mr Hu 57 was a vice-president of CMG He had a long career in port and logistics sector with various senior roles at several Chinese state-owned enterprises including Shanghai Zhenhua Heavy Industries and China Harbour Engineering Co

Before entering the top management of CMG in 2018 he was the vice chairman and managing director of China Merchants Port Prior to that he was at the helm of China Nanshan Development (Group) and Colombo International Container Terminals mdash both affiliated with CMG

Pipeline operators to develop VLCC-capable terminal off Texas PIPELINE operators Enbridge Inc and Enterprise Products Partners have agreed to develop an oil export facility that can receive very large crude carriers in the Gulf of Mexico

The so-called Sea Port Oil Terminal or SPOT consists of

onshore and offshore facilities including a fixed platform located approximately 30 nautical miles off the Texas coast south of Houston in Brazoria County in a water depth of about 115 ft

It is designed to load VLCCs at rates of about 85000 barrels per hour or up to 2m barrels per day

The Louisiana Offshore Oil Port or LOOP remains the only facility in the US able to accommodate VLCCs

EPP chief executive Jim Teague said SPOT was ldquoto support growing exports of US crude oilrdquo

Freeport LNG starts commercial operations in TexasFREEPORT LNG has started commercial operations for its first liquefaction train part of a planned four-train facility located on Quintana Island near Freeport Texas

Michael Smith founder chairman and chief executive of the company called the start ldquoa significant milestonerdquo and said the firm was looking forward to kicking off production from the next two trains

Commercial operations for the second and third trains are expected to start in January and May next year respectively with the commissioning work for the former underway and the construction on the latter nearly completed


Classified notices




zero-carbon fuel alternatives such as ammonia and green hydrogen to replace existing marine fuels

ldquoI donrsquot think that the fuel choice of the future has been made yetrdquo Mr Henderson told the forum ldquoTherersquos a long way to go on this and the more that I look at these (future) fuels the more that my technology team and Shell looks at these the more we see challengesrdquo

Newbuilding orders are stalling amid fears that ships propelled by liquified natural gas or residual or distillate fuels may have a limited lifespan Therersquos also rising concern that the slow adoption of LNG-fuelled engines is because itrsquos seen as a ldquotransitionalrdquo marine fuel

But the worldrsquos largest classification society DNV GL signalled at the forum that gas might be used for longer than expected as a marine fuel

ldquoMany talk about gas as a fuel being a transition type of fuel Irsquom not so certain that the transition will be shortrdquo Knut Oslashrbeck-Nilssen DNV GL Maritime chief executive told the forum Shipowners had only two choices today mdash to do nothing or use LNG as a fuel he said

ldquoWe could even see in 2050 and beyond that gas as a fuel will still be a very attractive solution Gas is absolutely a very viable solution now and will be for the next couple of decadesrdquo he said

The forum discussed recent challenges for a hydrogen-fuelled vessel trialled by Shell Mr Henderson said hydrogen was chilled to a liquid at minus 253 degrees Celsius compared to minus 162 degrees Celsius for LNG As a result Shell could not use the same inerting system for LNG

Kathi Stenzel the managing director for Intertanko said there were no regulations for shipping hydrogen either as a fuel or as a cargo and that the trial presented significant engineering challenges Intertanko represents independent tanker owners shipping energy commodities for oil traders and companies

Hydrogen was piped initially through the same pipe as LNG in the trial she said ldquoThere was liquid oxygen forming out of the air around it which if course is incredibly dangerous and not to be recommendedrdquo according to Ms Stenzel

Therersquos no single solution for alternative fuels she added ldquoBatteries and fuel cells might be the answer for the ferry sector and short sea shipping LNG right now is [a solution for tankers] but itrsquos probably not getting us close to where we want to be [on carbon emission reductions]

ldquoItrsquos not just a shipping question but a question about global energy We have to do something now and therersquos no excuse to sit back and say lsquotherersquos no perfect solutionrsquo We donrsquot have a perfect solutionrdquo

Mr Henderson said technology needed to be developed with support from governments and industry to fund research and development alongside widespread collaboration

ldquoItrsquos going to need collaboration on a scale that we have never ever seen in this industryrdquo he said ldquoNot just collaboration across shipping with owners engine and equipment manufacturers shipbuilders and class societies Itrsquos going to need collaboration outside with other industries as wellrdquo

ldquoWe may not have the first choice when it comes to ship fuelrdquo he warned ldquoIt could be that in even more difficult to de-carbonise industries such as airlines they may have the first choice of the fuel and we may have to have the second or third choice of the fuelrdquo

Shell had trialled wind sails which had reduce fuel use by 8 and also used air lubrication which reduced friction underneath ships to achieve a further 5 reduction in emissions Digitalisation had cut fuel costs a further 15 while a joint project with the Port of Rotterdam had reduced time in ports by 20 again achieving emission savings Mr Henderson said

ldquoIf you then add to that LNG as a fuel where an independent study has shown a reduction of emissions of 20 we can get to a stage by reducing our emissions by something of an order of 60 to 70

ldquoThat reduces the [decarbonisation] challenge so itrsquos not 100 itrsquos something like 30 to 40 Then we can look at mobile carbon capture on ships and get to the situation where wersquore making very big inroads on reducing carbon emissionsrdquo























WHAT TO WATCH
























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WHAT TO WATCH
























ANALYSIS







































































MARKETS












































Classified notices

























ANALYSIS







































































MARKETS












































Classified notices








































































MARKETS












































Classified notices













































Classified notices



Daily Briefing - Lloyd's List...vessels, he told the Lloyd’s List Outlook 2020 forum, held in...

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Transcript of Daily Briefing - Lloyd's List...vessels, he told the Lloyd’s List Outlook 2020 forum, held in...